ICRC to Gazette $22bn PPP Projects in 2022, Says Acting DG

•SGF calls for reduction of risks, costs of doing business, others

James Emejo in Abuja
 

The acting Director-General, Infrastructure Concession Regulatory Commission (ICRC), Mr. Michael Ohiani, yesterday said the commission intended to gazette a pipeline of 53 eligible and bankable Public-Private Partnership (PPP) projects valued at about $22 billion this year.

He also disclosed that it published a pipeline of 51 eligible and bankable projects, worth over $17 billion in 2021, including projects from different economic sectors which had been granted the Outline Business Case Compliance Certificates, but which did not have identified bidders.

These came just as the Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, said the federal government and African governments to a large extent, must be addressed a number of issues to provide an enabling environment for the private sector to support infrastructure development and to stimulate and create a vibrant private sector on the continent and accelerate infrastructure development.

He said creating a friendly investment climate could only be achieved by reducing risks and costs of doing business and by securing private property rights, improving governance, fighting corruption, simplifying regulations, and promoting competition.

He said African governments must also resist pressure to erect trade barriers for intra-African trade to flourish adding that currently, intra-African trade amongst African states is about 10 per cent of total exports – the lowest amongst other regions in the world.

Both spoke at the opening of the Africa Public-Private Partnership Network (AP3N) summit with the theme: “Financing Africa’s Infrastructure through PPP.”

Ohiani, however, said there were 197 pre-contract projects at different phases of development and procurement on the ICRC website in 2022.

The ICRC boss said as of May 2022, there were 77 post-contract PPP projects under implementation at the commission’s Projects Disclosure Portal, adding that the portal is the first disclosure platform in the world, established in collaboration with the World Bank.

Among several other achievements, Ohiani said following the inauguration of the ICRC governing board, between 2010 and 2021, the federal government had approved PPP projects valued at over $9 billion, pointing out that the commission had issued 128 Outline Business Case Compliance Certificates which included certified bankable projects to date, to enable them to proceed to procurement phase.

He said the ICRC had also issued 50 Full Business Case Compliance Certificates to date which included projects to be submitted to the Federal Executive Council (FEC) preparatory to their commercial and financial closures.

Nonetheless, the ICRC DG said it was inevitable for governments to enhance the investment environment for both local and foreign players in the 21st century as well as look to innovative financing mechanisms that promote local capital markets, private sector risk, and rely on regulatory systems to balance investor and consumer requirements.

He said: “With fiscal and budgetary funding constraints plaguing governments across the continent, the cold reality is that private participation in infrastructure is an economic necessity, rather than an optional financing solution, as hitherto considered.

“Partnership between the public and private sectors for the financing, design, build, maintenance of infrastructure and delivery of associated services is absolutely necessary for Africa governments to meet the need for modern and efficient infrastructure, and for reliable cost-effective delivery of public services.”

He said governments all over the world, including the African continent, had come to recognise that the collaboration between public and private sectors remained crucial to securing dependable and sustainable funding for infrastructure and reducing the pressure on fiscal budgets.

According to him, PPP arrangements have engendered acceleration of infrastructure provision, faster implementation of projects, and reduced whole-life costs of projects.

He said incidentally, appropriate frameworks for PPPs were already in place and activated in most African countries including Nigeria, adding that these were expected to contribute to addressing the infrastructure deficit and operational constraints.

He said the summit offered the unique opportunity to have the details, the direction, the options, and focus on infrastructure financing, and to share thoughts, knowledge, and experiences on its key areas with a view to having a better understanding of infrastructure financing and administration to boost the African economy.

Mustapha, while commending the ICRC and other sponsors for sustaining the PPP dialogue process over the years, adding that, “We strongly believe that with the initiative of the African Continental Free Trade Agreement the situation will drastically improve.”

He said the forum has for the past few years provided unique investment opportunities in infrastructure, as well as for sharing knowledge and experiences with key policymakers, leaders in the private sector, and other strategic partners within the continent and across the globe.

The SGF said the role of the private sector in infrastructure development and structural transformation in Africa and the rest of the world could not be overemphasised, adding that many African countries have made significant moves to promote this, through restructuring of financial sectors and adoption of policies to create the enabling environment for the private sector to grow and thrive.

Specifically, he pointed out that countries including Nigeria and South Africa have started to reap the fruits of the various policy changes that were, and are still being initiated.

According to him, Africa’s private sector currently accounted for more than 80 per cent of total production, and two-thirds of total investment as well as responsible for over 90 per cent of formal and informal employment.

Mustapha, however, noted that in order to stimulate and create a vibrant private sector on the continent and accelerate infrastructure development – a number of issues needed to be addressed.

He said, “There is definitely the need to create a welcoming investment climate. This can be achieved by reducing risks and costs of doing business and by securing private property rights, improving governance, fighting corruption, simplifying regulations, and promoting competition.”

He also said there was need for financial sector development by strengthening regulatory and institutional frameworks to improve governance and increase competition, improving access to finance and financial literacy, developing payment systems and enhancing creditor rights adding that access to finance by the private sector remained critical.

The SGF noted that given the constraints on public budget for financing the ever-growing infrastructure needs and in keeping with the practice in other nations with similar situations, the federal government had encouraged and supported the strengthening of the framework for PPP policy.

He added that the current financial situation in the country occasioned by the global COVID-19 pandemic and dwindling revenue had made the shift to PPPs more compelling than ever before.

He assured that the government would continue to maintain the integrity and transparency that must form the basis of all decisions on PPPs to ensure the right framework for effective partnership and value for money.

The Director-General, Nigerian Governors’ Forum (NGF), Mr. Asishana Okauru, said the country cannot generate the expected growth in a sector without a commensurate or proportional increase of its infrastructure stock.

He added the ability of state governments to prepare PPP pipelines and bankable PPP projects, and offered a sustainable long-term approach to improving social infrastructure, enhancing the value of public sector assets, as well as making better use of taxpayers’ money.